Business Observer July 27 2017

INTERVIEW

Issue 76

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July 27, 2017

Distributed with Times of Malta

Mariott to open five star hotel in SmartCity, agents report Leading international hotel chain Mariott has confirmed and signed an agreement to open a major 300-room five star hotel in SmartCity, according to information being circulated by real estate agents promoting The Shoreline project within SmartCity. When contacted by this newspaper to confirm or deny the story, a spokesman for SmartCity declined to comment.

Last month, The Business Observer reported that the prominent five star Le Méridien Hotel in St Julian’s will be rebranding to the Mariott Hotel and Spa, after Mariott acquired its parent company, Starwood Hotels & Resorts. With the benefit of hindsight, a comment by Le Méridien Hotel’s General Manager Alex Incorvaja to this newspaper that they were proud to be ‘the first’ Mariott Hotel that will be opening in Malta, can now be taken within the context of a potentially additional five star Mariott Hotel being planned for the south of the island.

If it materialises, the opening of the Mariott Hotel in SmartCity is set to continue fuelling the controversy over whether it is acceptable that the promoters of the project are being allowed to change the scope of the original SmartCity project, venturing from the information technology and media industry into the residential and hospitality industry. On the other hand, there is no doubt that a five star hotel of such calibre and status will be a first for the south of Malta and it is likely to have a positive impact on various economic sectors in the region.

The real estate agents promoting The Shoreline have also stated that further major projects involv-

How the Nationalist Party candidates for leadership react to the issues that are most relevant to local businesses and the economy at large. see pages 3, 4 and 5 >

NEWS e correspondence banking controversy first came to the forefront at the end of last year but what effect has it had on the services provided by Maltese banks? see pages 7 and 8 >

ing international investors have been greenlit within SmartCity.

Renowned company Johnson & Johnson have allegedly signed a long lease agreement to open training facilities within SmartCity, while world-renowned company General Electric (GE) will be operating an orthopaedic and neurosurgery-specialised hospital. The same reports also stated that La Sapienza University, the largest European university by enrolments and one of the oldest in the world, has also signed an agreement to start offering postgraduate courses in the medical field. Furthermore, the same prospective investors were told that the ITS project will cater for 2,500 students, ‘plus a 150-room hotel’.

To date, the upmarket residential apartments in The Shoreline

project have proven to be a runaway success; 80 per cent of the currently available residential units in the new 11-storey development have already been snapped up by property investors, according to leading estate agents as reported by the business portal maltachamber.org.mt.

Maltachamber.org.mt also spoke to Steve Carter, Managing Director of Ricasoli Properties Ltd, who said that the take-up for the residences is as expected for the first phase. “Every single day we receive enquiries about The Shoreline as investors in property have adopted the principle ‘buy great property and wait’”.

Describing the advantages of The Shoreline residences, Mr Carter praised spectacular views, beautifully landscaped open spaces and community amenities.

“The Shoreline offers owners a unique and exciting experience of contemporary living in a new environment in Malta. These residences propose an important and essential residential component to the current office, and catering developments and a number of exciting projects that have already been announced at SmartCity.”

“The project is in a specially designated area which allows both EU and non-EU nationals to purchase property with the same acquisition rights as Maltese citizens, and without the need to obtain an Acquisition of Immovable Property permit. This has been noted by investors.”

Mr Carter also told maltachamber.org.mt there are no limits on the amount of properties purchased, and once acquired, the owner can lease them if they wish.

NEWS e six or seven-figure world of antiques and art may seem impenetrable to an outsider, but those in the know believe that they’re worth every cent. see pages 15 and 16 >

STOCK MARKET REVIEW Are boards of directors being adequately remunerated considering their duties, responsibilities and obligations towards shareholders and stakeholders? see pages 20 and 21 >

e Business OBSERVER

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July 27, 2017

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INTERVIEW

ADRIAN DELIA

ALEX PERICI CALASCIONE

CHRIS SAID

e PN leadership candidates on business and the economy e election of the new leader of the Nationalist Party, who will in turn become the Opposition Leader, is a major national event that is being closely monitored, not least by the business community. e Business Observer sought the views of the three main contenders, Adrian Delia (AD), Chris Said (CS) and Alex Perici Calascione (APC), who were the first to officially submit their leadership nomination, on issues that are most relevant to local businesses and the economy at large.

Manuel Zarb There were two swings in the last election – a swing to PN on corruption, and a swing to PL on economy. Do you agree with this assessment?

AD Whilst the PN vote wasn’t only gained on corruption, I agree that this is what the party machine waged battle on. Our problem was a failure to explain this vision to people, and this is the key reason why the Nationalist Party failed to grab back more voters who had

left the party. For its part, the Labour Party has owned its successes, but also used (or abused of) the power of incumbency.

CS I agree – in the 2017 election you had voters who had chosen the Labour Party in 2013, who returned to the Nationalist Party – these were

the main PN gains, people concerned about corruption and governance. On the other hand the economy was doing well, so you had people who switched to Labour. Another main reason was that Labour won over PN votes through the power of incumbency.

APC I tend to agree – my first impression is that a number of PN voters who voted Labour in 2013 returned to the PN this time round, but a number of people who voted PN in 2013 voted for Labour this Continued on page 4

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e Business OBSERVER |

July 27, 2017

INTERVIEW

Continued from page 3 year. One of the issues bringing people to the PN were the clear cases of corruption of the past four years, but the economy was a principal factor for people who voted Labour.

The Nationalist Party has had problems in the recent past engaging with the business community.

If you’re elected leader of the Nationalist Party, how will you engage with business?

AD The Labour Party has for the last four years been the pro-business party, but unfortunately it seems to see cosying up to business people as the way to do things. I disagree with this – what we need to do is to open up the economy with a sense of passion and opportunity. Businesses want certainty and opportunity, so Government’s clear agenda should not be to cosy up but rather to create opportunities and have a vision to open new areas of businesses.

CS I would reengage through continuous contact with the business sector, from big business to small business. We need to show businesses their importance, we need to understand them and their aspirations, and let them know that with the Nationalist Party in Government we will reach a solution to any problem, as long as this is within the parameters of the law.

APC The Nationalist Party was the party which made Malta probusiness – through its political vision over the years, it managed to act on plans to deliver economic growth. In fact, the Labour Party became pro-business by learning from the Nationalist Party. Our challenge now is to know what business wants, to know what the economy is like and to propose measures which are better, more interesting and more long-term.

Do you agree with the proposed tower developments in Sliema, Mrieħel, Gzira and St Julians?

AD I have not yet had opportunity to look into or understand these developments one by one, or see any reports which evaluate their impact. My instinct is that we cannot judge proposals ad hoc, one by one.

We need a long-term plan, and then we can see whether individual projects fit into that plan. I want to look at the country and have a plan for the next sixty years.

CS I have nothing against highrise buildings as long as studies have been done, and I fear many of these projects have not been done after careful consideration. It is important that development happens within a serious, studied, general plan when we know the impact on the local and national infrastructure, as well as the neighbourhood.

APC These developments worry me if this is where the country is going – do we want a country where all one can see is tower blocks?

Should we designate areas specifically for tower blocks? My fear is that we may be heading towards a vision of Malta as a Dubai, which I disagree with completely.

Do you agree that the rules of the game as far as SmartCity is concerned should change to allow for residential blocks?

AD Originally the compromising of such a large tract of land next to the sea was already a balancing act between sustainability and the common good, and the creation of 8,500 jobs with SmartCity as a commercial project gave it a lot of weight. To change the idea of SmartCity from a commercial project to a residential one is outrageous.

CS The aim of SmartCity was to be an investment hub in IT and financial services. If it becomes residential, the aim will have changed radically. SmartCity should truly become a commercial hub before we even think of residential use.

APC One needs serious reasons to change the reason for which SmartCity was built. As Opposition leader, Joseph Muscat had said that the Labour Party would agree with SmartCity as long as it was not a residential development. One needs to see the reasons for changing the rules of the game completely, before one can say whether they agree or not.

If you were elected Prime Minister tomorrow would you retain, scrap

or improve the Individual Investor’s Programme (IIP)?

AD From an investment scheme which is good and positive, it has sadly been warped into a sale of citizenship, which is completely different. My position is no to the sale of citizenship, yes to the creation of more quality jobs and opportunities, increasing a financial services niche, by developing a state of the art investment programme which sees real investment and residencies coming to Malta. If these are allowed to develop further, that would be a successful programme.

CS We can improve the IIP by seeing that those who buy citizenship are obliged to have certain genuine investment in the country; not something like secure Government bonds which can be sold after a certain period of time, but investment which creates quality jobs in the country. I have no doubt that if we direct towards this line of action, this can create places of work in Malta.

APC I disagree with selling citizenship as a product, plain and simple, but I am not against the concept of schemes, which have always existed, where someone who has genuine ties to the country can acquire citizenship. The IIP needs to change. Through the involvement of the Opposition, what the Government originally proposed – the sale of citizenship, pure and simple – has already changed, thanks to the introduction of residency requirements, for instance. Unfortunately, this programme seems to be shrouded in mystery, with the Government refusing to publish the list of those who acquired citizenship – and this is not right.

Let’s talk about Air Malta. There are effectively four options for its survival – let a foreign strategic partner take a strong minority shareholding with the Government retaining 51 per cent; privatise the airline to a foreign partner; involve Maltese investors; or allow Air Malta to fail. Which would you choose if you were in power today?

AD No to letting Air Malta fail, and certainly not total privatisation.

I wouldn’t distinguish between a Maltese and foreign partner; what is

“e first step I would take as Prime Minister would be to re-establish the country’s reputation abroad, as this is what every substantial foreign investment in Malta is built on.”

– Alex Perici Calascione important is that Government retains control whilst crucially protecting workers. We cannot have our national airline isolated because a private carrier decides that the route is more or less lucrative than before, so we have to make sure that strategic partners are serious, and do everything whilst ensuring transparency.

CS The preferred option is that Maltese investors get involved with Air Malta, so the third option is the best choice – the ideal is that you have a Maltese strategic partner, with the Government maintaining a majority shareholding or otherwise control over Air Malta.

What’s worrying is that post-election, the Government approach seems to have changed completely from that of the past four years, with different messages which show that the Government has no clear vision for Air Malta.

APC I can exclude letting Air Malta fail, as well as privatising it.

I’m not against in principle letting interested foreign investors participate, but Maltese investors need to be given the opportunity as well

to make proposals. The important thing is that we need Government control of the national airline.

Tourism Minister Konrad Mizzi has implied he does not agree with the Government’s approach of the past four years – I hope we have not wasted four years in what was already a precarious situation.

Polls show that corruption is a top voter concern, yet the party fought the last election on this issue and suffered an overwhelming loss. Do you believe that corruption is the most important issue facing the country?

AD Right now it certainly is the most important issue for the country to return to normality, and people want a return to normality. We cannot, however, stop at that – there are people who are more concerned with economic issues, and we also have to focus on making sure people can make a living. The Nationalist Party in the last election did not manage to clearly describe this vision of a Malta which has returned to normality whilst reassuring people about the economy.

e Business OBSERVER

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July 27, 2017

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INTERVIEW

CS You may have people who do not see it as the most important, but corruption and the collapse of our institutions shake the very foundations of the country. We need institutions which are constantly watching to investigate corruption allegations – however our institutions have not done their job, and this is very preoccupying.

APC Corruption is an enormous problem for the country, and when corruption is related to the most powerful people we should be worried tenfold. The electoral result does not at all diminish the importance of fighting corruption relentlessly. The people know there is corruption, but overall, they considered economic issues more when they went to vote. Corruption is a very important issue for me, whilst there are a few other issues I give the same importance to.

There are a number of ongoing magisterial inquiries in relation to serious allegations of fraud, corruption and money laundering at the highest level of Government. Are you concerned about the length of time the inquiries are taking, and should such inquiries be fast-tracked in the national interest and the interest of the accused?

AD Fast track and justice should not be in the same sentence at this level of seriousness. Justice delayed is justice denied, but we should not impose with any particular duration of time given the complexity of the cases and how important they are.

CS It is normal that magisterial inquiries take a certain amount

of time. I agree that the inquiries should be fast-tracked in the national interest, but making sure that the investigations are carried out properly and seriously, interrogating the right people, gathering information both from Malta and from abroad if needed. I have no doubt the magistrates involved are doing a good job, working with diligence so they can come to a decision in the shortest possible time.

APC The length of time which is most worrying is the length of time the FIAU report on corruption allegations remained in the Police Commissioner’s desk drawer. It is crucial that we let justice take its course – the magistrates must be left to do their work in serenity.

The relationship between the Prime Minister and Simon Busuttil had become very strained. How would you envisage that your relationship will be with Joseph Muscat?

AD That is a very hard question as I have never met the man – nor have I met Keith Schembri, despite interesting gossip that he’s been subsidising my campaign from people with nothing better to do.

CS I will call good good and bad bad – I will never shut up on what is being done badly, and I will criticise strongly any wrongdoing. I will maintain a working relationship with the Prime Minister to deal with situations where Government-Opposition cooperation is needed. Unfortunately, Joseph Muscat has failed to consult the Nationalist Party on appointments

“My position is no to the sale of citizenship, yes to the creation of more quality jobs and opportunities, increasing a financial services niche, by developing a state-of-the-art investment programme which sees real investment and residencies coming to Malta. If these are allowed to develop further, that would be a successful programme.” – Adrian Delia

and other situations where consultation was needed.

APC The relationship should be positive in the sense of two people who both know what their role is. I appreciate the Prime Minister has his own agenda, and the Leader of the Opposition has his own agenda and responsibilities. We can never shirk our responsibility to speak or take action depending on what any person may say.

If the PN was a private business concern it would have been declared bankrupt. How can you turn the PN’s financial fortunes – or misfortunes – if you’re at the helm?

AD I understand there has been a restructuring of finances in the past four years and it would be prudent to make my comments on this after I have been fully informed on the subject.

CS If there’s someone who has worked continuously to bring the Nationalist Party back to its feet, that person was me. I became Secretary General of the Party four years ago, and myself and other people worked to stop the haemorrhage. We put the party structures on a solid foundation, and the work we did has borne fruit. It will take time to make everything right, but there is a clear plan over a number of years to become self-sufficient and make sure that the Nationalist Party has no debts.

APC I have been party treasurer for the past four years. We addressed this issue head-on, and we are now following to the letter a 15year restructuring plan, which we

“I would reengage through continuous contact with the business sector, from big business to small business. We need to show businesses their importance, we need to understand them and their aspirations, and let them know that with the Nationalist Party in Government we will reach a solution to any problem, as long as this is within the parameters of the law.” – Chris Said began implementing around two years ago. The party has now restructured its loans, and we worked so that today, the party is registering a profit, whilst it has structural debt which it will repay over time.

You wake up tomorrow as Prime Minister of Malta. Policy-wise, what’s the first thing that you do?

AD I’d say a prayer to remain humble and close to the people.

Policy-wise, we need to understand how to create wealth whilst remaining very attentive to people.

Boasting about economic figures is useless unless we also understand that it is not the country which needs to be rich, but rather our countrymen and citizens, who must enjoy a better quality of life, and a better life overall.

CS The Prime Minister’s first decision is to appoint a Cabinet, where I guarantee I would give a role to the entire parliamentary group, which would be included in decisionmaking. If I become Prime Minister tomorrow, my first step would be to rectify the country’s institutions, making sure that they’re independent and reach the goals they were founded for.

APC The first thing is to make sure that you have the best Cabinet and office, with good and motivated people who will tell you what you need to hear rather than what you want to hear. The first step I would take as Prime Minister would be to re-establish the country’s reputation abroad, as this is what every substantial foreign investment in Malta is built on.

e Business OBSERVER

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NEWS

Maltese banks still offering crucial correspondence banking services Marie-Claire Grima Several local banks have confirmed to The Business Observer that they are still able to offer correspondence banking services to businesses operating in Malta, despite a number of high-profile international banks having withdrawn from their partnership with Maltese banking institutions, with one bank confirming it is still has an agreement with Deutsche Bank to offer correspondence banking services in both US dollars and the euro.

The correspondence banking controversy first came to the forefront at the end of last year within the context of a growing concern among the business community and financial practitioners on restrictions to the correspondence banking services, which are considered vital to the growing financial services and gaming industry in Malta. In November 2016, Prime Minister Joseph Muscat announced that he would be carrying out a personal visit to the United States in order to meet representatives of top banks to ensure that the services now in force are not withdrawn. Then, last month, the concern re-emerged after a leading bank confirmed that Deutsche Bank had stopped offering such services to the local bank.

Although the aftermath of the Panama Papers and the local controversies concerning PEPs and their alleged usage of Malta’s financial services in an unorthodox way did not help the situation, it appears that the problems faced locally related to correspondence banking services coincided with a global upheaval, rather than a problem related exclusively to Malta’s compromised reputation as a financial services centre. Surveys, reports

and studies from the World Bank, IMF, the Financial Stability Board and various other research organisations indicate that this is a problem affecting a number of countries and hundreds of banks, especially in smaller emerging markets and developing economies in Africa, the Caribbean, Central Asia, Europe and the Pacific. Some banks are finding the business model no longer viable due to high compliance costs compared to lower volume and low returns. Others find

that the threat presented by high risks of substantial penalties imposed by regulators is too high, especially where regulatory expectations and risks are unclear or cannot be mitigated or there are impediments to cross-border information sharing. Furthermore, the regulatory environment has increased in stringency, marked by more rigorous, compliance and prudential enforcement requirements in areas related to economic and trade sanctions, AML/CFT and

tax transparency. Smaller banks are particularly affected, since their volumes and scale justify even less the compliance risks and economics for their correspondences.

However, Malta’s banks remain vigilant of their duties to their clients and international partners, as well as the problems that ‘de-risking’ brings with it. The Business Observer reached out to Malta’s major local banks to see how the situation had continued to develop since it hit headlines last November and then

in June. “There is no doubt that the curtailment of correspondence banking services offered by large international banks to smaller banks is not a local phenomenon affecting only banks in Malta, but an international development,” said Deo Scerri, Chairman of BOV, after it was confirmed in June that Deutsche Bank had withdrawn its correspondence banking services for US dollar transactions from the bank. “It is also a major cause of concern for respected international institutions like the International Monetary Fund and the Bank of International Settlements. Bank of Valletta is very conscious of its obligations to ensure that the transactions it handles on behalf of its clients are bona fide and not aimed to condone or encourage financial crime. We regularly speak to our EU regulators to update them on the efforts we make to improve our antifinancial crime systems.”

“Business rationale and the associated compliance costs have led to some international banks curtailing correspondence banking services to smaller banks. Bank of Valletta, like other banking institutions maintains a number of correspondence banking relationships with international banks so that it can facilitate payments for its customers in a number of currencies,” a spokesperson from BOV commented to this newspaper.

Other banks contacted by The Business Observer confirmed that their correspondence banking facilities remained fully operational.

“HSBC Bank Malta carries out USD transactions on behalf of its customers via its correspondence banking arrangements within the HSBC Group. Our services are available to customers who have fulfilled all the Continued on page 8

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e Business OBSERVER |

July 27, 2017

NEWS

Banks remain vigilant of duties to clients and international partners Continued from page 7 necessary due diligence requirements which are part of our commitment to adopt the highest global standards of compliance which apply in Malta as in all other markets where HSBC operates,” a spokesperson from HSBC Malta stated.

Corinne Lanfranco, Head of Financial Institutions at FIMBank said that the bank was very wellserved by a network of global players in various currencies, and would shortly become a direct participant in Target 2, one of the largest payment systems in the world. “We offer these facilities to our clients, which include individuals, corporate entities and selected financial institutions, in support of the bank’s main activity, which is trade finance. Delivery of these services is facilitated by our recently launched digital banking platform, FIMBank Direct. We are committed to providing an enhanced banking experience to our customers, on the basis of a strong

“Surveys, reports and studies from the World Bank, IMF, the Financial Stability Board and various other research organisations indicate that this is a problem affecting a number of countries and hundreds of banks, especially in smaller emerging markets and developing economies in Africa, the Caribbean, Central Asia, Europe and the Pacific.” infrastructure built to support international settlements, foreign exchange and fixed term deposits.”

FIMBank confirmed that Deutsche Bank is one of their “prime, longstanding relationships in various currencies, including euro and USD,” adding that FIMBank has always endeavoured to meet its correspondent banks’ expectations and risk appetite. “We have very stringent policies and an Anti-Financial Crime Programme with a risk-based approach which has

been recognised by our partners as a key driver to safeguarding our common interests. Risk factors in our business segments, and the related risk mitigants have been acknowledged and commended, thus allowing us to preserve the integrity of our key relationships. In the wake of the recent surge in derisking which has affected the international community, local banks have their fair share of challenges to manage. If a bank is not serviced through an international

network, it will not be in a position to provide international payments services to its own clients. Local banks have to meet the exigencies of their upstream correspondent banks. Meanwhile, when assessing the risk of their respondents, the correspondent institutions must ensure that their assessment is sufficiently robust to consider all the relevant factors. Different levels of inherent risks must be clearly understood, and appropriate controls applied accordingly.”

“Malta is not immune to the derisking problem, with the banks and authorities following it with great interest and concern especially in recent years,” said APS CEO Marcel Cassar in a conference speech in May, quoted by the bank’s spokesperson as a reply to The Business Observer’s questions.

“APS Bank is a respondent bank, i.e. it receives services from global correspondence banks, such as Deutsche Bank. Our services and correspondence relationships remain as before, unchanged, however that does not mean that the challenge has receded since the correspondence banking problem is a country as well as a cross-border phenomenon and the reasons stated above continue to be relevant as ever. What we can do is ultimately what is in our control, as a bank and as a country, i.e. upholding and maintaining the highest standards of governance, risk and compliance management that provide a measure of safety for our correspondences.”

e Business OBSERVER

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e Business Observer is Malta’s leading business newspaper distributed with Times of Malta every month.

Editorial Coordinator Marie-Claire Grima

EDITORIAL

Publishers Allied Newspapers Ltd. Content House Group Ltd.

e right man for the job For the economy to continue growing on a long-term basis it needs democracy to function well, and let’s face it, democracy in Malta is not going through the best patch in its history. Over the past few editions of The Business Observer, we have spoken at length about the Government and its remit when it comes to the supposedly independent functions of some of the country’s main institutions. Today we’re focusing on the state of affairs as far as the Nationalist Party in Opposition is concerned. No country can be a strong democracy and sustain long-term economic growth if it doesn’t have proper and legitimate parties in Government and in Opposition that are functioning well, and there is no doubt that the Nationalist Party in Opposition is facing a very difficult time. The fact that none of the candidates has emerged as a natural strong contender is a cause for concern, and the infighting between the conservative and liberal factions of the Nationalist Party seems have taken a turn for the worse over the past few weeks. The party seems to be at a crossroads and its commercial structures are still in need of further serious internal restructuring on an operational, commercial and political level to be able to carry its work effectively and to be a natural challenger for the Government seat, instead of a feeble grouping of politicians without the clear knowledge or understanding of where they and their party is heading. The members of the party who will be choosing their new leader have a very tough job ahead, although that pales in comparison to the onus which will be placed upon the new leader himself.

One of our main stories in this issue of The Business Observer is an extensive interview with the three main candidates who have thrown their hats first in the ring. We thought that since the bulk of their exposure on other channels will be predominantly on mainstream subjects, it made sense – given our pro-business agenda – to focus our interviews with them on their leadership credentials from a business and economic point of view. We believe it is in the businesses’ best interests and the country’s best macro-economic interests to have a

strong functioning Opposition that can in due course mount a serious challenge to be an alternative Government.

The candidates themselves make valid arguments in our interview that have a business and economic perspective linked to them. It is also worth noting that they are disagreeing fundamentally on important issues that can have an impact on the business climate and macro-economic outlook. For example, the lucrative but highly controversial Individual Investor Programme, or as it is often referred to, cash for passports, drew mixed reviews. While Adrian Delia said that selling citizenship is a flat out ‘no’ in his books, and is apparently prepared to ditch it if elected Prime Minister, and Alex Perici Calascione said he disagreed with selling citizenship but is in favour of citizenship schemes for investors with genuine ties to Malta, Chris Said seems to have accepted the sale of citizenship in principle, and would direct his efforts towards improving it. The three would-be party leaders also expressed different views as to the best way forward for Air Malta, whose future remains as murky as ever. All of them said no to letting Air Malta fail or to privatising it completely, and all of them agreed on the importance of Government retaining control of the airline. However, Dr Delia said he wouldn’t distinguish between a Maltese and foreign partner, while Dr Said and Dr Perici Calascione both stated that the ideal strategic partner would be a Maltese investor.

There are several issues that the three candidates agree on, such as the reasons why the Nationalist Party gained support but still suffered another harrowing electoral defeat, the need to restore the PN’s pro-business image which has been well and truly appropriated by Labour and maintaining SmartCity as an IT hub. All have strengths but also clear weaknesses, with no apparent front runner to eclipse the competition. Hopefully, as the campaign progresses and we get to know the candidates better, the best leader for the party, for business and for Malta will emerge more clearly.

Advertising Enquiries Tel: 2132 0713 Email: info@contenthouse.com.mt Advertising Sales Petra Borg Urso Brand Manager Advertising Sales Coordinators Lindsey Napier Marvic Cutajar

Printer Progress Press Ltd.

BUSINESS OPINION

Changing the status quo

Dr Michelle Gialanze Slow progress in adding more women to boards has dominated recent conversations in Malta. The more progressive companies are taking the lead, looking for female board members in new places and bringing them on board in new ways. Many feel they still have a long way to go, but their experiences are salutary for those that are lagging behind. In fact, a quick overview of companies on the Malta Stock Exchange and the women representation may be seen right; this information is correct when compiling information for this article.

The reasons of this may include a need of a change of mind set. What’s needed are purpose and intention to change the status quo — a set of goals and motivations that will underpin decision making. For some, that has meant establishing a target number of board positions for

women, while others take care to ensure that the list of candidates is diverse from the beginning, without adherence to a static quota.

Another reason often cited for not having women present on boards, is that there is a small pool of female executives willing to take up directorship positions.

Overcoming this reality of unequal numbers requires openness to creative solutions. One is to move beyond the standard practice of focusing a search on executives with prior board experience. Ultimately, it’s about defining what is non-negotiable, such as digital or finance expertise, and then seeing what is flexible so as to deliver on gender-diversity goals and to meet specific challenges.

Effectively creating and cultivating an active pipeline of female candidates is arguably the single most important element of a successful board-inclusion effort. When conducting a search, this means relying on both personal networks and lists available to identify candidates.

Relying only on the former, particularly where a board is composed primarily of men, risks perpetuating the candidate slates from the old-boys’ network.

It’s important to recognise, of course, that broader gender inclusion at all levels of the company is critical. Companies can

drive board inclusion by preparing their own female executives for future board participation, placing them in roles with profitand-loss responsibility, ensuring they have committed mentors and sponsors, and equipping them with the knowledge and skills needed to confront the governance and strategy issues that boards typically face. This can create a virtuous cycle that speeds progress on board diversity and counteracts cynicism with success stories.

Recent research suggests that when companies encourage diversity among their board members, they benefit in several ways, including helping to draw in and motivate talented employees, representing the customer base more intuitively, boosting their decision-making quality, and increasing their profit margins. To my mind, it’s a little bit like assembling an orchestra. One needs a bunch of different instruments; whether I have three of one and two of the other, or three of one and three of the other—that misses the point. It’s about how all of the instruments blend together. As we have seen, most companies here in Malta have not reached that stage as yet.

Dr Michelle Gialanze is an Educational Consultant at the Ministry of Education and President at Women Directors in Malta.

Name of Listed Company

Board Composition

1

Bank of Valletta p.l.c

1/8 women

2

HSBC Bank Malta p.l.c.

2/9 women

3

Lombard Bank Malta p.l.c.

No women

4

Mapfre Middlesea p.l.c

1/10 women

5

Simonds Farsons Cisk p.l.c.

2/8 women

6

GO p.l.c. Ord

No women

7

International Hotel Investments p.l.c.

No women

8

Plaza Centres p.l.c.

No women

9

GlobalCapital p.l.c.

No women

10

FIMBank p.l.c.

No women

11

Malta International Airport p.l.c.

1/7 women

12

Santumas Shareholdings plc

No women

13

Medserv p.l.c.

1/6 women

14

Grand Harbour Marina p.l.c.

No women

15

6pm Holdings p.l.c.

2/6 women

16

MaltaPost p.l.c.

No women

17

RS2 Software p.l.c.

No women

18

MIDI p.l.c.

No women

19

Malita Investments p.l.c.

No women

20

Tigne Mall p.l.c

3/5 women

21

Pefaco International plc

No women

22

Malta Properties Company plc

No women

23

PG p.l.c.

2/7 women

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CASE STUDY

Bortex to open Valletta boutique hotel, Sliema luxury apartments Jo Caruana The hospitality and property arm of the Bortex Group is months away from opening its first boutique hotel in Valletta, as well as a luxury block of apartments in central Sliema.

Bortex is a household name that’s synonymous with quality in Malta – ask anyone where they buy their tailored suits or hire their formal wedding-wear, and they are bound to mention one of the many Bortex stores that’s dotted around the island.

But what some people might not know is that the Bortex Group is actually a very diverse company with a vast portfolio of activities to its name, including garment manufacturing, design and retail, real estate, and hospitality. Theirs is a legacy that has been carefully crafted over the decades, since entrepreneur Sunny Borg first started the business on his return to Malta in the 60s. Today, the group is run by his two children – Karen Bugeja and Peter Borg, who rotate the chairmanship of the company of a biennial basis. The group board of directors also includes Peter’s son Sam, COO of the manufacturing and branded wholesale division, as well as CFOs Christine Demicoli and Sandra Borg together with non-executive director David Debono. “It’s a dynamic team with different skill sets and competences that complement each other very well,” Mr Borg said.

In the decades since Sunny Borg opened Bortex’s doors in 1964, the garment division of the business has continued to grow substantially, setting up factories in Tunisia and China that supply private label tailoring to some of the best-known brands on the Eu-

PETER BORG, MANAGING DIRECTOR, BORTEX

ropean high street. A retail division was set up and the ‘Gagliardi’ brand launched, first on the local market and within months on the international marketplace too. On the local market the retail operation takes a multi-brand format which not only offers Gagliardi products but also proposes thirdparty branded products, including Ralph Lauren – with whom the

group has exclusive representation on the local market – Lanificio Flli Cerruti, Loro Piana, Lanificio Ermenegildo Zegna, Lacoste and Gant. The manufacturing and retail side, which includes the wholly-owned Tunisian subsidiary, employs over 650 people spread between its Tunisian manufacturing plants and its operations in Malta. This includes a

“On the manufacturing and retail side, plans include the further internationalisation of Gagliardi, with nine more international stores planned for the next three years.”

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“The opening of the new hotels, spa and beach club will mark other important milestones for the Group and truly highlight our father’s legacy – a legacy that we have been so proud to build upon.”

specialised made-to-measure tailoring facility and the divisional head offices which house the design, sales and marketing, finance and production planning departments, as well as buying and merchandising, product development and quality control departments for the Gagliardi operation.

“The launch of our own brand, Gagliardi, was a major milestone,” explained Mr Borg. “It’s a complete menswear proposition with a distinctly Mediterranean identity and it has been very well-received by the market. In fact, Gagliardi now has more than 50 international doors with stores in eight countries, where it stands proudly next to some of the top brands in the industry, on some of the most beautiful shopping streets in Europe.”

Meanwhile, a Malta based e-commerce operation also delivers merchandise worldwide with the biggest market being the US. However, while fashion and textiles were a clear passion for Sunny, he didn’t stop there. He soon diversified the business into the hospitality market, with the lease of a Sliema hotel in the 1970s. “He loved that hotel and soon decided to lease another one, this time on the Sliema seafront and followed by another two in the north of the island,” said Ms Bugeja. “In fact, the fivepetalled rose that he chose as his logo reflected his ambition to create a chain of hotels and, soon, he chose to buy them rather than lease them, with another opening in Sliema in 1996.” Today, the hos-

pitality and property arm of the company operates the Hotel Plevna in Sliema, which is being developed into a lean luxury spa hotel and beach club that will open its doors in July 2018. “We are also months away from opening our first boutique hotel in Valletta,” explained Ms Bugeja, “and will shortly unveil a luxury block of apartments in central Sliema.”

And Sunny’s portfolio continued to grow – from textiles to hotels, he then ventured into the real estate market locally and overseas, with property in the South of France.

“He never rested on his laurels and was constantly up to something new,” Ms Bugeja continued.

Looking to the future, the Group has a very busy three years ahead of it, with extensive growth planned across all aspects of the business. “On the manufacturing and retail side, plans include the further internationalisation of Gagliardi, with nine more international stores planned for the next three years,” Mr Borg explained, adding that the company will also be investing in prestigious premises for its multi-brand Bortex stores and the further development and internationalisation of its made-to-measure service.

As for the hospitality and property segment there is also plenty in the pipeline. “The opening of the new hotels, spa and beach club will mark other important milestones for the Group and truly highlight our father’s legacy – a legacy that we have been so proud to build upon,” Ms Bugeja concluded.

KAREN BUGEJA, DIRECTOR, BORTEX

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NEWS

Millions worth of art and antiques sold in Maltese auctions each year Marie-Claire Grima The six or seven-figure world of antiques and art may seem impenetrable to an outsider, but Pierre Grech Pillow believes firmly that they’re worth the money. “Antiques and art are definitely a good investment, particularly pieces with Maltese provenance – anything related to Malta tends to do very well at auction. Taste is subjective, but instinctive – if you see a good piece and a bad piece, you’ll know immediately which one you prefer, and there’s always demand for good paintings.”

Mr Grech Pillow’s auction house, Obelisk, holds four main auctions every year. During each one, he sells between €2 million and €5 million worth of antiques, paintings, sculptures and other objets d’art. “The items we auction belong to private collectors who inherit the antiques and decide to sell. Between the moment we receive an object for sale and the one when we auction it, a whole year might pass because of the inheritance process.” He says he manages to sell between 70 and 80 per cent of the items on auction each time round. The rest is either

handed back to the owner or retained for another auction in the next quarter. Mr Grech Pillow, who also sells by private treaty, cannot not say precisely how much money the art and antiques trade generates in Malta overall, but states confidently that it’s a “multi-million figure.”

Obelisk was established nearly a decade ago with Mr Grech Pillow following in his father, Winston’s (nicknamed Benny, as in Benny’s Antiques) footprints and pursuing his own passion for antiques. He’s seen thousands of fascinating items come and go, but naturally there are a few that stick out in his memory. “For me, the most memorable auction was the sale of the contents of the late Giorgio Borg Olivier’s office. The desks and cupboards still had documents and letters inside dating back to when he was Prime Minister. It was definitely one of my best auctions ever.”

Mr Grech Pillow says that many of his clients buy antiques or art for investment purposes, including for the purpose of putting them in trusts. “It’s just like investing in property. With property, the location is important; with antiques and artworks, it’s the style, the artist and the period.

RESTORED PAINTINGS AT PREVARTI. PHOTO: ALAN CARVILLE

“For me, the most memorable auction was the sale of the contents of the late Giorgio Borg Olivier’s office. e desks and cupboards still had documents and letters inside dating back to when he was Prime Minister.”

– Pierre Grech Pillow, Obelisk Auctions In both cases, there’s the element of physical ownership. Some people say that antiques are going down, but interest is actually rising, especially thanks to the influx of foreign buyers. The best pieces will always remain good.”

Joseph Sammut, director of Belgravia Auction House in St Julian’s, holds a more cryptic view of buying antiques as an investment. “I have been involved in the auction world since 1977.

The market was stable and

healthy, increasing gradually, sometimes slowly, until 2004.

The language used then was that antiques were an investment.

Then things changed. InvestContinued on page 16

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Preserving your art investment Continued from page 15 ment is a gamble based on foresight by individuals who think they can predict the future. Only when an object is sold can its investment potential be quantified.

A buyer needs to decide on that one for himself.”

Belgravia holds around six auctions annually – approximately four of these are house auctions. Mr Sammut says that attendance rises and falls depending on content. “Overvalued lots rarely sell, while undervalued lots are just embarrassing. For a few years now, our catalogues have carried an estimate which allows you to compare them to the results of the auction. Furthermore, the internet has helped create a more knowledgeable and discerning client. It has also brought prices in line with international market for non-Maltese lots.”

Pierre Bugeja, the founder of PrevArti, one of Malta’s premier conservation and restoration companies, leads a team of experts who specialise in the

“A painting that has already been attributed to an artist or one which could be attributed in the future is considered to be a good investment; however there are a lot of factors which should be taken into consideration.”

– Pierre Bugeja, PrevArti

preservation of antique furniture, paintings and sculpture. He believes that more often than not, there is something that can be done to conserve and restore a painting, although it becomes an issue when a painting has been heavily overpainted in a past restoration intervention and there is less than 50 per cent of the original painting left.

However, there are exceptions to every rule. “Even though we’ve had several discoveries of paintings belonging to Old Masters,

the most satisfying restoration process was one that we carried out on an 18th century painting, depicting a religious scene that formed part of a collection. It had been very badly damaged due to a severe mould attack, and anyone who looked at it thought it would be impossible to put together again. The paint had flaked, powdered and fallen out to the extent that it resembled fragments you would see in an archaeological find. Following hours and hours of work, we

managed to put it all together and only a little part was missing. This was a great achievement – seeing the client so content to have been given something that was thought to be lost completely was one of the highlights of my career.”

Mr Bugeja says that while works by renowned artists that are signed are usually a good catch if proven to be authentic by a professional, there are also paintings that were never signed that are still high in value – unsigned pieces were com-

mon in the Baroque era. “A painting that has already been attributed to an artist or one which could be attributed in the future is considered to be a good investment; however there are a lot of factors which should be taken into consideration. It is always recommended to seek the professional advice of a conservator.”

Mr Bugeja offers the following tips for people who are out to make a killing at auction.

“Do your homework during the viewing and collect as much information as possible. Seek professional advice from a conservator.

Take a small UV torch with you to check whether there are any previous restoration interventions.

The ‘easiest’ damage to fix would be working on a painting with no (or close to no) previous restoration interventions. This is because in the past restoration was extremely invasive and materials used were irreversible making it more difficult to restore. And ask for the cost of conservation and restoration of the item beforehand - this way your investment will be preserved.”

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FIMBank EVP in the Maltese Michael Davis, FIMBank’s Executive Vice President of Compliance and Money Laundering Reporting Officer, commented on Malta as a financial services centre of repute, highlighted the MFSA as helpful, and emphasised on the importance of regulatory knowledge and continuous training to maintain the highest levels of compliance standards.

Mr Davis arrived in Malta six years ago, having worked in financial services in London for 25 years, mostly within compliance and regulation. “I was surprised to find that the regulators here in Malta (i.e, the MFSA and the FIAU) were, in some respects, tougher than what was the FSA (now FCA and PRA) in the UK. This was particularly so in the case of anti-money laundering and terrorist financing. The FIAU’s Implementing Procedures, based on the Prevention of Money Laundering and Funding of Terrorism Act, for instance, adopts a more onerous interpretation of the EU

MICHAEL DAVIS, FIMBANK’S EXECUTIVE VICE PRESIDENT OF COMPLIANCE AND MONEY LAUNDERING REPORTING OFFICER

AML Directives than many other European countries. The problem in Malta is that the supervision and oversight by the FIAU is restricted because they are underresourced. Although there is considerable talent in Malta, it is not easy to attract experienced compliance professionals to fill in the growing vacancies in this field.

This problem is exacerbated by the fact that salaries in the public sector are very low in comparison to the private sector, and it is hard for them to compete with financial institutions who in turn, compete with the gaming sector for good compliance staff. Ultimately, the reputation of financial services in Malta depends on how well-regulated the industry is, and there has to be considerable investment to make it work. However, my view is that financial services will continue to flourish in Malta.”

Mr Davis also discussed reports that some foreign banks have stopped offering correspondent banking services to banks in

“Ultimately, the reputation of financial services in Malta depends on how wellregulated the industry is, and there has to be considerable investment to make it work. However, my view is that financial services will continue to flourish in Malta.”

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of Compliance affirms confidence jurisdiction and regulator Malta. “I have heard that this is the case with some banks in Malta. We deal with a number of major, large upstream correspondent banks who scrutinise our systems and controls on a regular basis. This is normal and we welcome their scrutiny. In this regard, I am pleased to say that we pass muster. However, we have a strict policy of not offering our services to some industry sectors that are considered to be very high risk from a money laundering and terrorist financing perspective and this is welcomed by our correspondent banks. It is also true that some major foreign banks have a blanket approach to de-risking and may well perceive Malta to be high risk simply because it is a Mediterranean island. You will recall that it was not long ago that we became the subject of attention only because Cyprus was under the spotlight.”

Mr Davis highlighted FIMBank’s compliance credentials

“Whilst it is not so easy to develop the regulatory knowledge, we invest in training and keeping up to date.

We also make good use of technology to ensure that we are efficient. Most importantly we maintain open and transparent relationships with our regulators who, in my experience, are always very helpful and provide guidance where needed.”

and how FIMBank ascertains high standard levels of compliance. “First of all it is because of the compliance team we have which although is small, is perfectly formed! As I indicated ear-

lier, it is really difficult to hire experienced compliance staff. On the other hand, we have been very lucky because most of our staff within the department have been recruited from within the

Bank and we have trained them to become compliance professionals. Given that they had good knowledge of the business, the workings and systems of the bank, they virtually hit the

ground running. In order for a good compliance culture to thrive within an organisation it is essential to have good ‘tone at the top’ that actively promotes a policy of zero-tolerance to compliance failure. Furthermore, without a good governance infrastructure, the organisation will not sustain stable growth.”

He continues by saying that “whilst it is not so easy to develop the regulatory knowledge, we invest in training and keeping up to date.

We also make good use of technology to ensure that we are efficient. Most importantly we maintain open and transparent relationships with our regulators who, in my experience, are always very helpful and provide guidance where needed.”

When asked on how Brexit will impact Malta's financial services, Mr Davis commented that he expects Malta to benefit, adding further that financial services are here to stay.

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STOCK MARKET REVIEW

Listed companies – the board composition

Doreanne Caruana

The idea to write an article on the composition of boards of directors came about as I attended an annual general meeting (AGM) last month.

Typically, during AGMs, shareholders are asked to approve (or otherwise) the company’s financial statements of the previous year, confirm the re-appointment of the company’s external auditors, elect a board of directors (should an election be required) and approve their remuneration. It was precisely the resolution on directors’ remuneration that captured my attention during this particular AGM. The aggregate amount for this particular

board of directors was, in my mind, too little when taking into consideration the number of directors on the board and the duties of directors and responsibilities and obligations towards shareholders and an array of stakeholders.

In my capacity as a corporate adviser to a number of companies which issue equity or debt securities on the Maltese capital market, I get the opportunity to meet with a number of directors where lengthy discussions and brainstorming sessions take place on the ideal funding strategy of the company which they represent. Invariably, the discussions revolve around whether the company should raise funds through a debt instrument (such as bonds) or issue additional shares to strengthen the equity base and perhaps complement this through additional sources of funding such as bank financing. While the team of advisers is engaged merely to advise on the best course of action, the ultimate decision is always one that the directors need to take, taking into account the advice, given the strategic direction of the company, while at the same time, acting responsibly towards the shareholders of the company. The premise is that

the directors are elected by the shareholders to represent their interest in the company.

It is also expected that the board of directors is composed of people with a certain level of experience, both in the sector where the company operates as well as the general economic environment in Malta (or any other jurisdiction where the company operates). They should be ‘fit and proper’, meaning that they should always conduct themselves with honesty, competence and integrity. Furthermore, directors need

to be available for participation at board meetings, which are very much dependent on the type of company such directors sit on. For example, if a listed entity has a number of ongoing projects, directors may be required to meet more frequently compared to directors of other companies which have a more limited scope.

The size of the board is regulated by the company’s own memorandum and articles of association (M&A), which sets the minimum and maximum number of members

“While the team of advisers is engaged merely to advise on the best course of action, the ultimate decision is always one that the directors need to take, taking into account the advice, given the strategic direction of the company, while at the same time, acting responsibly towards the shareholders of the company.”

on the board. The M&A also indicates the percentage shareholding that is required to elect directors to the board of a company. The number of board members is also related to the type of business the company operates in as well as the size and nature of the company. A larger company operating across a multitude of sectors typically requires a larger number of members on the board. Meanwhile, it is worth highlighting that following changes in the Listing Rules of the MFSA last year, a company’s board cannot have fewer than three members.

The Listing Rules of the MFSA also stipulate that companies having debt or equity securities listed on the Malta Stock Exchange must also have an Audit Committee. The principal tasks of this committee are to oversee the financial reporting function of the company and evaluate transactions that the board needs to consider, making sure that these are conducted on an arm’s length basis, on a sound commercial basis and in the best interests of the issuer. The changes in the Listing Rules effective as from August 2016 now also dictate the composition of an Audit Committee. It must have at least three directors which

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need to be acting in a non-executive capacity and the majority of the members are to be independent.

While the Companies Act does not distinguish between a non-executive director and an executive director, a circular issued by the MFSA in October 2016 states that a non-executive director is one who is not involved in the day-to-day management of the issuer, thus having no contract of employment with the organisation. On the other hand, the element of independence is referred to in the Listing Rules.

The independence test requires that directors are “free from any business, family or other relationship with the issuer, its controlling shareholder(s), or management of either, that creates a conflict of interest such as to impair his judgement”. In fact, following these changes to the Listing Rules, various company announcements were issued informing the market of changes to the composition of audit committees to be in conformity with revised legislation. As such, issuers had to identify candidates that would satisfy the independence/non-executive roles while selecting candidates with the relevant experience. Some issuers also had to change their M&As to accommodate the additional director(s) necessary to abide by the new Listing Rules (particularly if they had a board which was constituted up to the maximum number of directors possible in terms of their existing M&As).

There are other committees that emerge from the Code of Principles of Good Corporate Governance.

This Code consists of a set of principles which companies having listed securities on the Malta Stock Exchange are encouraged to follow The Code is not compulsory but it is good practice for issuers to follow it wherever possible. Companies which are listed on the Malta Stock Exchange are required to include a report in their Annual Report that identifies which principles have been adopted and which were not.

In such cases, there would also need to be justification for the reasons for not complying with the Code. In Malta, some of the companies listed on the MSE also have a Nominations Committee, whose function would typically include the procedure for a formal and transparent nomination of directors to a board. This committee is typically found at the larger (group of) companies and the main task of the directors sitting on this committee would be to review and suggest nomination of directors.

There is much more to say on the composition of the boards of directors and the resultant committee required under the Listing Rules. In my view, it is very evident that the role of a director is a very important one since such an individual is held responsible for the company’s strategic direction, and thus, their remuneration should be reflective of their involvement in the business, the expected contribution and availability to the organisation, and the experience they bring to the table.

Some of the local companies should therefore adequately compensate directors accordingly to reflect the delicate role of the individual.

Doreanne Caruana is a Corporate Advisory Executive at Rizzo, Farrugia & Co (Stockbrokers) Ltd.

Rizzo, Farrugia & Co. (Stockbrokers) Ltd, “Rizzo Farrugia”, is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This article has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned (if applicable) before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities, if any, to which this article relates (other than executing unsolicited client orders) until such time as the recipients of this article have had a reasonable opportunity to act thereon. Rizzo Farrugia, its directors, the author of this report, other employees or Rizzo Farrugia on behalf of its clients, may have holdings in the securities herein mentioned, if any, and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither Rizzo Farrugia, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this article.

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Embracing use of mobile devices is way forward for business operations Martina Said “Business applications are becoming ever more important for businesses everywhere.

With an increasing number of mobile devices used by company staff, embracing mobility presents an invaluable opportunity for companies to improve workflows, increase productivity and differentiate themselves from competitors,” said Malcolm Micallef, General Manager of Stride Technology.

Mobility is one of three key technology trends highlighted by Mr Micallef that are changing the way businesses conduct their operations. Interestingly, he explains, a significant number of hours per employee per year are gained through mobile productivity. More companies are embracing mobile apps, and organisations are now demanding applications to be mobile-first, meaning they are first built to fit mobile, and then desktop devices. Many of the applications marketed by Stride Technology are accessible from mobile devices via native apps or mobile web apps. These applications range from expense management and absence management to CRM, financials and order taking software.

Stride Technology is a newly established company, spawned from the business applications unit that was previously part of technology company PTL. Stride Technology and PTL are part of Harvest, the Hili Ventures Technology Division.

Mr Micallef explains that PTL previously acted as an end-to-end service provider, offering comprehensive solutions to various sectors, but technology has moved at a formidable pace, and customer demand has evolved exponentially. This has led technology companies to evolve into specialist providers. “We recognised this shift and wanted to further our position as a thought leader. As an independent company, Stride Technology will focus on integrated business applications from global partners and niche business solutions.”

Stride is now focused squarely on helping to automate and transform organisations through their established business technol-

MALCOLM MICALLEF, GENERAL MANAGER OF STRIDE TECHNOLOGY. PHOTOS BY ALAN CARVILLE

“With Cloud, customers can access their software on-the-go from any location, on any device, providing maximum flexibility to employees.” ogy solutions and professional consultancy services. The company partners with worldrenowned software suppliers such as The Access Group and CitiXsys Americas Inc. “We offer a full suite of integrated business software solutions, both on-premise software and cloud-based solutions, across multiple sectors,” Mr Micallef added. These include solutions for finance and accounting, HR software, CRM, service manager, and specialised solutions for health, care management, education, recruitment agencies and not-for-profit. The company also offers solutions for venue booking, ticketing and ePOS, and integrated Supply Chain Management solutions such as ERP systems, MRP systems, Warehouse Management Systems, Production Scheduling and Financials.

“Stride has retail management solutions with integrated eCommerce, as well as hospitality solutions and restaurant POS systems. We also offer mobile solutions such as the automated order-taking system, which allows sales representatives to take orders directly at customers’ locations.”

From a services point of view, Stride Technology provides technical consultancy, product customisations and integration, which are key value-added services offered by a team of experienced business application consultants. “Each and every customer has a dedicated Account Manager who is responsible for building and maintaining strong, long-lasting customer relationships.”

Cloud-Based Solutions and Business Process Automation are two other trends leading the way in the business tech world.

Mr Micallef asserted that Cloud applications have become an essential component of a modern company’s IT infrastructure, where the applications provide the mobility, flexibility and scalability that is of great importance to ambitious and fast-moving businesses. “Our set of cloud applications can work individually or together as a complete business suite. Whatever the industry, our cloud solutions drive efficiency into departments, helping finance, HR, sales and marketing to work smarter and faster.”

Making the move to Cloud offers plenty of benefits, and as a company’s business operations expand, they can try additional applications that support their business growth. “Customers can access their software on-the-go from any location, on any device, providing maximum flexibility to employees. Cloud also helps increase productivity by streamlining processes and ironing out inefficiencies so that staff can focus on what matters: the company’s success,” said Mr Micallef. “Our cloud solutions can integrate with the client’s existing systems, where they are quickly implemented and easy-to-use, and the cus-

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tomer’s data is safe and secure as their data is SSL encrypted.”

As for Business Process Automation, Mr Micallef explains that this is a great way of transforming an organisation into an agile, high-performing operation. “Business Process Automation empowers businesses to achieve more by doing less: it improves productivity by allowing employees to concentrate on activities that are important, by providing their business with the tools it needs, and it increases profits and reduces costs by saving the organisation time and money as a result of removing repetitive manual administration from employee workloads. It also reduces risk by eradicating human error and enforcing company procedures to reduce exposure to financial risk.”

The Business Process Automation solutions offered by Stride Technology are various, including the creation of alerts through easily-definable business rules where, for instance, daily email notifications can be fired out to the relevant staff to advise that persons are on vacation leave; the generation and dynamic distribution of reports and documents, where, on a specific date every month, the system automatically picks up the customers with a pending due balance of over 30 days, and fires out a statement automatically to those customers only, eliminating the need for an individual to manually go through each account; and the creation of workflow processes to leverage submission and approval processes.

This works well with absence management where an individual can apply for leave, the respective manager receives a notification

on their phone, clicks on it and approves or not, and the applicant is notified immediately. Business Process Automation solutions can also integrate applications and systems through an array of data connectors and APIs. Asked how small businesses can gain from simple IT solutions that are cost-effective and appropriate for small scale operations, Mr Micallef explained that Cloud-based software does in fact cater for small businesses without needing to invest in or worry about having a disaster recovery solution in the unlikely event that they may experience a natural or human-induced disaster.

“With cloud technology, companies don’t have to purchase equipment and build out and operate a data centre, and they don’t have to direct significant investment towards hardware, facilities, utilities and other aspects of operations. This means that they do not need to worry about having their systems paralysed,” he asserted. “Most cloud providers are extremely reliable in providing their services, with many maintaining 99.9 per cent uptime. As long as there’s an Internet connection, employees can get to the applications they need from practically anywhere.

Some applications even work offline.”

Looking ahead, Stride Technology will be introducing a new product on the market at the end of this month, an order-taking application that the team is excited to launch.

“Our long-term business goal is to continue delivering solutions based on our customers’ needs and keep up with technological advances. Although finding the right resources locally can be challenging, our

“As an independent company, Stride Technology will focus on integrated business applications from global partners and niche business solutions.” people are also very important to us at Stride, and we will continue investing in our people through training and provide them with a good atmosphere at the workplace to make it an exciting environment to work in

through new projects, new products and new technology,” said Mr Micallef. “I strongly believe in a simple formula where employee engagement plus customer satisfaction translates into business success.”

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BUSINESS UPDATES

Satabank achieves direct participation in STEP2 SEPA Credit Transfer clearing

DHL increases energy efficiency despite heavier workload DHL Malta managed to increase its energy efficiency in 2016 by five per cent over 2015, despite a 16 per cent increase in workload, an audit on its energy performance revealed.

Apart from an energy management strategy focused on seven key areas, DHL Express Malta identified a rate of 13 per cent failed first delivery attempts for its residential customers. It then developed and trialled a system of drop-off boxes to improve customer service as well as reduce subsequent delivery trips. A trial in three localities proved successful, and plans are underway to increase this to nine localities.

The trial resulted in nine tons of CO2 emissions reduced and the expansion is expected to increase this significantly.

DHL Country Manager Charles Schiavone shared DHL Express Malta’s experience with energy efficiency in Malta with business and stakeholder representatives at a business breakfast held at the Malta Chamber in Valletta. The event was organised by the Malta Business Bureau (MBB) to share proven successful energy efficiency strategies with relevant businesses. It was the first of several events that will be organised over 2017 and 2018 as part of the Investing in Energy Project.

“DHL Express Malta adopted an entire strategy focused on maintaining energy efficiency while also identifying and tackling areas for improvement,” said Joe Tanti, MBB CEO. “Their strategic approach is worth emulating, and their altruism in sharing information is appreciated.”

Attending business and stakeholder representatives raised several points in the following discussion, including the possibility of using night-time deliveries to alleviate traffic, and the use of electric vehicles to reduce pollution. DHL pointed out that Malta’s limited road infrastructure and traffic situation made road operations the least productive amongst its European partners, and consensus was wide that night-time deliveries for business customers is worth exploring, particularly in view of a worsening traffic situation. Amongst the challenges facing electric vehicles are range and battery life, particularly for vehicles carrying heavy loads for delivery. While technology is expected to overcome these barriers, the attractiveness of gaspower or hybrid vehicles was outlined as a potential bridging measure.

Digitalisation using software that analyses route and vehicle performance could also lead to improved performance and route planning based on realtime information. This was widely agreed to be the way forward in the short term, with DHL revealing plans to use such software as of 2018.

The Investing in Energy Project is run by the Malta Business Bureau in partnership with The Energy and Water Agency and The Malta Chamber of Commerce, Enterprise and Industry, with co-financing from the Regulator for Energy and Water Services and the Ministry for the Economy, Investment and Small Business.

Satabank plc has achieved a number of milestones including becoming the principal member to issue cards and acquire payments for VISA and MasterCard, the first Maltese bank to achieve direct participation in STEP2 SEPA Credit Transfer (SCT) and SEPA Direct Debit (SDD) clearing through the European Banking Authority (EBA), and a direct participant in TARGET2 settlement system.

The bank, which opened in Malta in March 2016, will be amongst the first banks in Europe to adopt the Instant RT1 Payments system later on this year. The latest developments also mean that the bank’s offering to its increasing clientele is now wider and offers more solutions and Satabank plc is consolidating its position as the leader in providing different payment solutions to suit all needs through its use of the latest technological advances.

Satabank plc was also the first Maltese bank to obtain direct participation in STEP2 SEPA Credit Transfer (SCT) clearing through the European Banking Authority (EBA). STEP2 is a Pan-European Automated Clearing House for retail payments in euro. STEP2 provides a

state-of-the art network-independent processing engine, which is based on global ISO standards and is a highly resilient processing system with full disaster recovery features and operational procedures that are regularly tested with the user community.

Important developments are also envisaged for the coming months when Satabank plc will adopt the Instant RT1 Payments system. The new pan-European payment system will be operating around the clock on any day of the year. It will support clients in transferring euro transactions between payment accounts in less than 10 seconds end-to-end, with immediate availability of the payment amount to the beneficiary. The Instant RT1 Payments system will complement the TARGET2 system and will revolutionise the world of instant mobile payments throughout Europe.

“The bank is committed to continue to offer our customers the widest possible range of payment solutions, which is fundamental in today’s dynamic world,” said Chief Executive Officer Mario Gauci. “Satabank plc will strive to remain at the forefront of the latest financial services technologies and developments.’’

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BUSINESS UPDATES

Businesses need solutions not hurdles In February 2014, the Planning Authority set up its own Business Development Unit – a team of employees dedicated solely to business-related applications. Since then, around 90 per cent of these types of applications are being approved, compared to the previous 50 to 60 per cent.

Robert Vella is the manager who spearheads the Business Development Unit. He said that when the unit was set up three years ago, the first task was to understand why so many applications were falling foul of policies. This wasted considerable resources in terms of time and money. He had to propose solutions for a complete reversal of this negative trend. “The result was a series of initiatives under the ‘Businessense’ brand” Mr Vella said.

Businessense aims to ease processes for smaller businesses.

Some of the problems affected every type of application, from one-room shops to large-scale showrooms.

These were tackled through the introduction of new planning laws.

What have we actually done? We primarily addressed people’s main concerns. The Authority’s tariffs for commercial developments were too high. It could cost several thousand

euro to apply for the redevelopment of an abandoned block in Valletta into a boutique hotel. Now this has changed. “If you want to restore a building in an urban conservation area, in many cases there are no fees,” Mr Vella explained.

What about changing the use of a property? Well, this is another important adjustment. You can now change the use of your prop-

erty without the need of a permit, as long as the impact on the community is reduced as a result of the change. Need to change the use of a shop to an office? “Now all you need to do is notify us of the change,” Mr Vella said. Some of the problems were more complex.

They required new legislation or definitions. A case in point is the concept of a ‘lodging house’. It is

now possible for a resident-owner of a property in an urban conservation area (UCA) to rent out rooms up to 16 people.

Accessibility is always on our mind. We do recognise the marvellous job done by the Commission for the Rights of Persons with a Disability in raising awareness. Does it make sense to insist on wheelchair access to a property which can only

be reached through a stepped street? No, it does not. We have signed a memorandum of understanding (MOU) with the Commission on accessibility issues.

“We are fully in favour of accessibility. The MOU took a realistic approach which solved some 80 per cent of the problems faced by businesses,” Mr Vella said.

The unit also took another ‘bull by the horns’ approach on other hot issue: permits for outdoor catering areas and their enforcement. “The government is behind us on this.

We are exploring ways to improve our ability to take immediate action with long lasting effects, and we will also soon be looking at updating the policy on kiosks too,” Mr Vella said.

The Business Development Unit’s main objective is to ensure a level playing field. The sector desperately needs a policy which considers the needs of each locality, the interests of all stakeholders, and the need to provide clarity and a fair decisiontaking platform shared by all entities involved.

For more information visit www.pa.org.mt By the Communications Office (Planning Authority)

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BUSINESS UPDATES

TradeMalta launches Malta’s first International Business Awards Malta-based businesses which can demonstrate international success will be officially recognised by TradeMalta through the new Malta International Business Awards (MIBA). Launched in the presence of the Minister for Foreign Affairs and Trade Promotion Carmelo Abela, the MIBA will celebrate the success stories of enterprises selling innovative services and products internationally, thus contributing to economic growth.

The Malta International Business Awards will culminate in a ceremony, endorsed by the Prime

Minister, on 10 November. Enterprises can already submit applications through the TradeMalta web site (www.trademalta.org/ events/malta-international-business-awards-2017).

The deadline for submissions is on Monday 31 July.

There are seven awards to be won on the night: Exporter of the Year - Small Business, Exporter of the Year - Medium Business, Exporter of the Year - Large Business, Exporter of the Year Emerging Markets Business, Innovation Exporter of the Year, High Potential Exporter of the

OFFICIALS FROM TRADEMALTA, HSBC BANK MALTA, AND BPC INTERNATIONAL WITH MINISTER CARMELO ABELA (FOURTH LEFT) AT THE ANNOUNCEMENT OF THE MALTA INTERNATIONAL BUSINESS AWARDS

Year, and Overall Exporter of the Year 2017.

A brainchild of TradeMalta with the strategic support of HSBC

Malta Commercial Banking, the initiative enjoys the endorsement of the Office of the Prime Minister and the Ministry for Foreign Af-

fairs, the sponsorship of audit firm Grant Thornton, and the partnership of marketing and communications firm BPC International.

Improve your financial HERTZ Malta launches insights with Infor SunSystems new commercial van rental service

Integrating and streamlining your financial reporting function will improve your overall business efficiency, saving your company time and money. One of the greatest obstacles to achieving a streamlined financial reporting function is the sheer amount of reporting that is generally required.

A simple and effective way of streaming the reporting process and other important aspects of your business is through the use of Infor SunSystems. Infor SunSystems delivers real-time financial reporting analysis, enabling you to close your books faster. It’s a comprehensive, global financial management solution with unparalleled adaptability – delivered at an extremely competitive cost of ownership. Infor SunSystems combines technological innovation and usability, with a depth of functionality achieved through decades of practical application.

Financial reporting is not simply a process of delivering documents to stakeholders and other external parties by a specified deadline – it also involves gathering the necessary information about your business in order to un-

derstand what is actually happening. With Infor SunSystems, you can now turn all the financial information collected into useful business insights.

Find out how Infor SunSystems can help your business make the right financial decisions by visiting www.computimesoftware.com/sunsystems; T: 2149 0700; E: info@computimesoftware.com

HERTZ MALTA is announcing the launch of its new commercial van rental service.

This new service features a wide range of modern vehicles and offers flexibility to suit different needs.

“This new service complements our existent car rental services and marks another important milestone for Hertz in the Malta,” said Ron Scerri, General Manager, Hertz Malta.

“With the launch of our new van rental service, we are offering Hertz’s quality and reliability to businesses looking for a strong partner on the road. This launch is in line with our plan to strengthen our products and services, whilst reaffirming our leader position in transport solutions in Malta,” added Mr Scerri.

A business relocation, moving home, delivering a special type of cargo or carrying out a particular one-time job, are all occasions when Hertz’s van rental

service can guarantee a reliable and flexible solution.

Hertz’s Van Rental service is available from the Hertz Head Office in Qormi Road Luqa. For more information phone on T: 2247 5910 or E: vanrental@hertz.com.mt

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BUSINESS UPDATES

Crane Currency ramps up BOV Together for Charity lends a helping employment efforts as hand to Puttinu Cares work progresses Crane Currency Malta Ltd has ramped up its employee recruitment as work progresses apace on its state-of-the-art facility in Hal Far which is now at an advanced stage. In September 2016, Crane Currency acted on its plan of building a new world-class banknote production and global customer experience centre in Malta to keep pace with its growth projections. Crane Currency will start operations by December 2017 and will be in full production by early 2018. This was announced

by John Scott, Director of Operations, during an information session which was held recently for people interested in joining Crane.

Dating back to 1755, Crane Currency produces banknotes, security technology and paper, and is the world’s fastest-growing currency company.

Crane Currency designs and prints banknotes for over 50 central banks around the world. The US government remains a key customer for the company, having provided it with paper and security features since 1879.

Crane Currency currently employs more than 1,100 people in the US and Sweden and will initially be employing more than 200 people at its Malta facility, with the number increasing potentially to 500. The Malta facility will be equipped with state-of-the-art equipment where every machine will be brand new and fitted with the latest technology.

Crane Currency will provide extensive training to support this equipment, and a number of employees have already received training in Japan, Germany and Austria.

and Service Dogs (Malta) Foundation

Puttinu Cares and Service Dogs (Malta) Foundation are the two NGOs that benefitted from this year’s Together for Charity campaign launched by Bank of Valletta in May. Through the campaign, which ran during the month of May 2017, the bank was automatically making a donation on behalf of its cardholders, for every purchase effected with BOV credit and debit cards.

Mario Mallia, the bank’s CEO, presented the monetary donations to Dr Victor Calvagna, Chairperson of Puttinu Cares and Joseph Stafrace, Vice-President of Service Dogs (Malta) Foundation. Present for the event were Ivo Camilleri, Executive Electronic Banking, and Charles Azzopardi, Head PR and Marketing.

As Mr Mallia explained, “Bank of Valletta is delighted with the keen response of our cardholders to this campaign. Whilst enticing our cardholders to use their cards even more, and enjoying the benefits linked to using this efficient method of payment, the bank makes a contribution towards two organisations that work very hard, towards different niches within our society.”

“From our end, we reiterate our commitment to remain at the forefront in harnessing technology, so as to enable our customers to have easy and seamless

access to their funds, from wherever they are,” Mr Camilleri said.

Thanking Bank of Valletta for the initiative, Mr Stafrace explained, “It has been proven that service dogs can help improve the life of a broad spectrum of individuals, from the hearing impaired to people on the autistic spectrum and individuals suffering from conditions such as diabetes and seizures.” Dr Calvagna also thanked the Bank and its employees for their show of solidarity and altruism, explaining that Puttinu Cares already owns 19 apartments and rents another six in Sutton UK to offer accommodation, primarily to patients receiving treatment at the Royal Marsden Hospital, and is now seeking to acquire additional property, closer to London’s centre.”

In addition to the donation raised through the BOV Cards for Charity campaign, Dr Victor Calvagna was presented with another donation of €5,000 that was raised by BOV employees during a dress-down event that was organized across the bank on a Friday in May.

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BUSINESS UPDATES

RE/MAX Letting appoints assistant regional letting manager Michaela Tabone, a veteran professional in the letting industry has been promoted at RE/MAX Malta as the Regional Assistant Manager for their lettings division, assisting in the coordination of training and recruitment of new agents as well as developing the present dedicated training courses for associates working within the outfit.

Ms Tabone will join Edward Agius, the company’s Regional Letting Manager in managing the exponential growth the company is experiencing. “Michaela is the perfect fit to further expand the business and to continue to improve the service in which our clients are accustomed to,” Mr Agius said.

“Michaela has the experience, the business acumen and the real estate knowledge that will complement the management team in reaching its strategic goals,” RE/MAX Malta’s CEO Kevin Buttigieg said.

Ms Tabone has been a RE/MAX Letting Associate since 2004 and has won a number of accolades throughout her career, including top letting associate and runner-up of RE/MAX Malta a number of times, together with a host of inter-

MICHAELA TABONE

national awards. The appointment is in line with the Company’s corporate strategy aimed at consolidating RE/MAX Malta position as the number one letting agency.

RE/MAX Letting employs 36 letting associates working across

Malta with their main stronghold being Central, Sliema and St Julian’s and surroundings areas.

The company also has plans to expand its lettings operations further into the north and south of the islands.

American University of Malta to welcome first batch of students this autumn The American University of Malta (AUM) is a private, accredited, American-style liberal arts university, located in Bormla (Cospicua) and will open its doors this autumn, welcoming students from all over the globe.

Initially, AUM is offering three undergraduate degree programmes; Bachelor of Science in Accounting, Bachelor of Science Business Administration, and Bachelor of Science in Game Development, as well as one graduate degree programme: Master of Business Administration.

The AUM community is eager to embark on this exciting journey.

Beginning in autumn 2018, AUM will add two additional undergrad-

uate degrees: Bachelor of Science in Finance, and Bachelor of Arts in Graphic Design.

The American University of Malta will begin accepting applications for the spring 2018 (January) intake on 15 August and will continue through 1 December 2017. Generous tuition discount and scholarship programs are in place, providing a 50 per cent tuition discount for Maltese and EU nationals that meet certain requirements. Merit-based scholarships are available and range from partial tuition to full tuition, depending on degree programme as well as academic and personal achievements.

For more details visit the AUM website, www.aum.edu.mt

New ifs Malta committee elected Kenneth B. Micallef was confirmed as President of the Institute of Financial Services Malta (ifs Malta), for another year, following the Annual General Meeting and first committee meeting. The committee also welcomed two new members: Jean Paul Attard and Christian Farrugia.

The ifs Malta committee for 2017-2018 is composed as follows: President: Kenneth B. Micallef; Vice-Presidents: Peter Calleya and Mark Agius; Honorary Secretary: Anatoli Grech; Honorary Treasurer: Joseph Ricca; Members: Jean Paul Attard; Roberto Apap Bologna; Joseph Bugelli; Christian Farrugia; Paul Farrugia; Peter

Gatt; Kenneth Genovese; Adrian Mallia and Wendy Zammit. ifs Malta is the island’s leading financial services professional body. Through the provision of an array of educational services ranging from short technical qualifications to Master’s level degrees and through encouraging continuous professional development, the Institute has positioned itself at the forefront of promoting and fostering professionalism among financial services practitioners and developing Malta as a reputable financial services centre.

For more information about ifs Malta, please visit www.ifsmalta.org

(LEFT TO RIGHT): PETER GATT; ANATOLI GRECH; JEAN PAUL ATTARD; PETER CALLEYA; ADRIAN MALLIA; KENNETH B. MICALLEF; KENNETH GENOVESE; MARK AGIUS; JOSEPH RICCA; JOSEPH BUGELLI AND ROBERTO APAP BOLOGNA. MISSING FROM PHOTO: CHRISTIAN FARRUGIA; PAUL FARRUGIA; AND WENDY ZAMMIT.